Interestingly, Apple traded sideways for the next couple of years. By 2006, it hit the $70 range, and it was near $200 by the end of 2007. During the "market madness" of late 2008 and early 2009, shares fell below $100, but since then, they have not really looked back on the run to $700 and world domination.
AAPL data by
I however, have looked back, because it is important to analyze investment successes and mistakes. In this case, I had no idea how big the iPod would become, and no idea about the level of innovation in other products that Apple would bring to the market. I understood that the company was trading for less than cash, but for whatever reason, that was not enough at the time.
If I had purchased the shares when they were trading for less than the company's cash, I wonder how long I would have actually held them. Not long enough, I suspect. Even a well-placed trailing stop-loss, adjusted as shares rose, would probably not have done the trick.
All of this leads me to a question. What names am I currently shunning that have Apple-like potential? Facebook (FB)? I don't think so. Here's the difference, and part of the lesson learned: Expectations for Apple in the early 2000s were low, and this was priced into the stock. I can't say the same about Facebook.At the time of publication, Heller had no positions in stocks mentioned. This article is commentary by an independent contributor, separate from TheStreet's regular news coverage. Follow @JonMHellerCFA
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV